Samsung and Android will shine in 2014, Apple still - Gartner says
In 2014, an estimated 2.5 billion devices will be sold worldwide, and increase of 6 percent over the previous year, according to Gartner. More than 75 percent of the devices will be mobile phones, with Android achieving more than double the share of Apple’s iOS or Windows Phone in 2014.
So it’s clear, barring unforeseen circumstances and any gross inaccuracy in Gartner’s estimates, that Android will be the statistical leader, with 42 percent of the 1.9 billion mobile phones sold next year running some flavor of the Google-inspired, open source mobile operating system. While statistically, Android is a big winner that doesn’t mean it is the only winner or the financial winner.
For the first quarter of 2013, Apple captured 57 percent of worldwide mobile phone industry profits, according to Canaccord Genuity’s T. Michael Walkley. The remaining 43 percent went to Samsung. For the quarter ending June 30, Walkley predicts that the introduction of Samsung’s Galaxy S4, paired with Apple’s lack of a new smartphone in nearly a year, will put the South Korean electronics giant ahead of Apple in the profit arena.
The rest of the Android smartphone makers are inhaling Samsung’s exhaust. In addition, Samsung has in effect been a stabilizing force for a fragmented Android ecosystem that wrestles with several Android and user interface variations.
While Samsung dominates the growing Android market, Gartner projects that Apple will garner 14 percent of all devices next year, compared to 15 percent for Microsoft Windows. Apple’s share will come from mobile devices, iPhones and iPads, as well as its popular MacBook laptops, while Microsoft will feed mostly on its legacy of PC and laptop sales despite its persistent efforts leapfrog the competition in mobile.
Microsoft and its Windows allies, including Nokia and a host of PC makers, are expected to grow device shipments more slowly than the Android purveyors or Apple next year, Gartner predicts. In fact, Gartner projects both Apple and Android operating system sales to grow more than 17 percent in 2014, and Windows around 10 percent. Blackberry (RIM) will continue is slide as well as the “Other” category as more users worldwide adopt devices from the top three platforms.
Apple and Samsung are an odd duopoly that has managed to carve out all the profits and dominate the field. The two companies have been bitter rivals in the courts, with Apple claiming a major $1.05 billion victory in a patent suit last year.
Apple is also a major component customer of Samsung, although the iPhone maker is trying to wean itself off its rival’s chips. Apple has the advantage of completely controlling its hardware and software, and Samsung has the advantage of manufacturing many of its own components. Apple is parsimonious with new products, waiting a year between new iPhones, while Samsung seems to issue new products every month.
What the two companies share currently is momentum, big ad budgets and a halo effect. As the established leaders they are able to sell across their product lines — phones, tablets, laptops, PCs — and gain converts to their brands. They are perceived by buyers as cool, safe and fashionable.
For Apple, the halo effect has always been at work but it wasn’t until the mobile products that it turned into a financial and market share bonanza. Samsung took many lessons from Apple, some which the courts found to be illegal, but has forged its own aggressive path with its Galaxy family to achieve its halo. But fortunes can change, as in the fate of the Blackberry and Nokia’s Symbian operating system. For the foreseeable future, however, it appears that Apple and Samsung will continue their complicated duopoly, carving up the majority of profit and a growing portion of sales.